lucyellensmum- the charges are unlawful due to the follwing which I have cut and pasted from martin lewis's site moneysavingexpert.com. I got all of my info and letter templates from here as I found the other sites a bit harder to navigate. Here is the info about charges:
"Let?s be technical for a moment. The core rule is if there?s a breach of contact under English or Scottish law, any charge should not exceed the cost of the breach. In other words, banks can only impose charges which are in proportion to their costs.
Yet when you go beyond your overdraft limit, or have a cheque or direct debit payment bounce, the bank charges a penalty of £30 to £35 a time. Is a charge of this scale really proportionate? Remember it could simply be a charge for going a penny over the limit.
Importantly, the bank is actually fining you for going over the limit, and this fine is too high, hence under the law of penalties this is ?extravagant?. After all, it simply sends a computer-generated automatic letter with a franked stamp. In fact a recent report by BBC2's The Money Programme, got a group of former senior bank staff together and they estimated the real cost, even being generous to be only somewhere between £2.50 and £4.50.
When you look at all this together, bank charges are unlawful, and that means the bank did not have a right to take your money. Yet it did, and it did it automatically, thus you are entitled to get your cash back. "
Therefore, every time your bank has charged you for going over your agreed overdraft limit or they have charged you for a bounced cheque or direct debit, they have taken money from your account that is disproportionate to the money it cost them to do it. In your statements these charges will be called something like "Paid Referral". With my bank they started off at £20 a pop 6 years ago and have risen to £30 each time now.